Back in 2017, three years before the COVID-19 pandemic took a bite out of movie theater ticket sales, a disruptive little app known as MoviePass did the same. But instead of closing theater doors, MoviePass made an offer that many cineastes couldn’t refuse: For less than $10 per month, MoviePass members could see as many movies as they wanted in a real, live cinema.
From the beginning, the app was divisive: Movie theater chains like AMC hated it, while moviegoers either thought it sounded too good to be true or thought it sounded too good to be true and paid the $9.95 fee anyway. It didn’t take long for the cracks in the company’s business plan to start showing—and swallowing customers whole.
Fast forward to 2021: After several last-ditch efforts to redeem itself, including rebranding itself as MoviePass Ventures and unleashing Gotti on the world (an act that should be a crime in and of itself), MoviePass is no more. After shutting down its ticketing services in late 2019 and filing for bankruptcy in early 2020, MoviePass is dead. But the body has yet to be buried, as the Federal Trade Commission (FTC) wasn’t about to let its creators slink off into obscurity without answering for the mess of a company that they created. So the FTC filed a lawsuit alleging that MoviePass and its partners “took steps to block subscribers from using the service as advertised, while also failing to secure subscribers’ personal data.”
On Tuesday, The New York Times ran a feature on the FTC’s suit against MoviePass. While the parties appear to have reached a settlement in the matter, the details behind this scam of a company—and the lengths they went to to make sure that as many customers as possible did not get what they paid for—are pretty mind-boggling.
As Daniel Victor wrote in The New York Times:
The company hoped that by subsidizing full-price tickets for millions of users, it could negotiate bulk prices from theaters and find other ways to make money from its users. That never happened, and executives, looking to cut costs, focused on trying to make its most active users less active, according to the F.T.C. complaint.
In one effort, the company invalidated the passwords of the 75,000 subscribers who used the service most often, while falsely claiming “we have detected suspicious activity or potential fraud” on their accounts, the F.T.C. said. Many of the people who tried to reset their passwords were unable to because of technical problems; the app would not accept their email address, they would not receive a password-reset email, or the email would link to a nonworking website, the F.T.C. said.
When users complained, customer service would take weeks to respond, the F.T.C. said. About half of the users successfully changed their password within a week, the F.T.C. said.
Sadly, that was just the beginning of the creative methods company executives came up with to ensure that MoviePass was not delivering on its promises—at least not to every customer. In some cases, they sent out emails to some of the most frequent moviegoers requesting proof of their physical movie tickets; if the user failed to provide this on more than one occasion, their account would be canceled.
The Times article also talked about a “trip wire” that the company created (but, of course, did not publicize) for members who went to the movies three or more times per month.
“The company grouped subscribers based on how often they used the service, then, once the group hit an unannounced limit, the people in the group would be unable to use the service, regulators said,” according to The New York Times. “The users often did not know they had been cut off until they arrived at the theater, expecting to use their subscriptions, they said.”
If only MoviePass executives put this much thought and ingenuity into making the company work instead of figuring out how to screw over the largest number of paid subscribers in the fewest possible steps. While the final details of the settlement have not yet been made public, one can only hope that part of it will require the responsible individuals to watch Gotti ten times in a row.